CLAUSE I—(Provision as to cost of medical benefit and administration expenses.) (Hansard, 3 July 1932)

§ Major MACKENZIE WOOD
I beg to move in Sub-section (1, a) to leave out the words "and the expenses of the administration."
This Bill has undergone great changes since it was last before the House, and I hope before the Report stage is completed we shall have some explanation from the Minister of Health as to the changes which have taken place and the reasons for them. In this Amendment I am raising a question of some importance which I raised briefly in Committee. The object of the Bill is to transfer to the approved societies the burden of providing an extra sum of money for medical benefit. That was given as the reason for the Bill, and that we understood to be its meaning. But if the words of this particular Clause are scrutinised carefully it will be seen that the money is not going to be applied solely for medical benefit, but that a certain proportion of it is to meet the extra cost of administration. We are all for economy at the present time, and it is particularly necessary that the expenses of public bodies should be carefully supervised. Hitherto it has been the custom to put a limit on the sum which may be expended by a particular body on office expenses. That custom has always been recognised in connection with the National Health Insurance scheme. It has been, and is, recognised with regard 98 to the approved societies themselves, and previously it was recognised with regard to the insurance committees with which this particular Amendment deals. I wish the House to realise that this Amendment does not touch the question of the administration expenses of approved societies. They have already been fixed at so much per member by Act of Parliament. No society is allowed to go beyond that particular sum, which was fixed, as I say, in a previous Act of Parliament and which it is not proposed to alter now.
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It is, however, proposed by the Bill to make an alteration in the case of the administration of the insurance committees. Under an Act of 1920 the amount which an insurance committee was allowed to expend in administration was fixed at 4d. per member. In the following year that allowance was increased by 50 per cent. At the same time an increase was made in the sum allowed for the administration of the approved societies. Now it is proposed to make a further increase applicable to insurance committees. I object to the increase on two grounds—first, because no adequate reason has been given for it, and, secondly, because of the form in which it is proposed, because if an increase is justified at all it should be to a certain specific sum beyond which no insurance committee should be allowed to go. I hope the HOUSE will remember that since the last increase was made in the administration expenses allowed to insurance committees the work of those committees has decreased, because the administration of sanatorium benefit has been taken away from them. In spite of the fact that their work has become less, the Bill proposes to give them more money to spend in office expenses. I say that that is bad, because no reason has been given for it, and it is bad in principle because there ought to be some limit, whatever it may be, so that a spendthrift committee may not be allowed to waste money. In Committee upstairs the right hon. Gentleman said there was a limit of 2s. 4½d. Of course, there is a limit to the amount of expenses allowed, because if you swallowed up in office expenses all the money that you had to pay out, naturally there would be a limit there, but that is no real limit at all, and the right hon. Gentleman knows that no one would suggest that any committee would 99 ever reach that limit. I hope the right hon. Gentleman will give us some assurance that when this Bill becomes an Act there will be some real check upon spendthrift insurance committees, that each one will be given some sort of limit, and that there will be no incentive for wasteful expenditure.

Mr. RENDALL
I beg to second the Amendment.

§ Sir GODFREY COLLINS
The right hon. Gentleman the Minister of Health is aware that the cost of administering the National Health Insurance Acts is rising steadily year by year. My hon. and gallant Friend the Member for Central Aberdeen (Major M. Wood) pointed out that for 1920 the cost was 4d. per member, and that in 1921 the cost had risen to 6d. It may be within the recollection of the Minister of Health that when the 1921 Act was being passed in, this House we raised two subjects during the Debate—first, that the National Health Insurance Acts should be consolidated into one Act; and, secondly, that he should take steps to review the working and administration of that Act. I will not, on this occasion, trouble the House with figures to show the high cost of administering the present Act. It is generally admitted, and although the Minister of Health will no doubt carry this Bill through, yet it will be ultimately to the injury of the insured person, to the millions of men and women who are paying their weekly contributions throughout the length and breadth of this land, that the cost of administering that Act is rising steadily week by week and year by year. Therefore, we appeal to the Minister to give the House some assurance that during the coming months the administration of the many Acts may be inquired into, with a view, not only to safeguarding the public purse, but ultimately to benefiting the insured person.

The MINISTER of HEALTH (Sir Alfred Mond)
The hon. Member for Greenock (Sir G. Collins) mentioned the general question of the cost of administration of the Insurance Acts. I do not think that he is correct in saying that the cost of these Acts is rising year by year. As a matter of fact, I think the cost of the central administration has 100 been reduced by no less than 3d. per head. The matter is receiving our best consideration, and I will not enter into it further at the present time, but I will deal more directly with the question raised by the hon. and gallant Member for Central Aberdeen (Major M. Wood) in moving an Amendment which he had already moved in Committee upstairs, and for which he found little support. What we are dealing with here is very simple. We are dealing with the question, not of the administration of the approved societies, but of the administration of the insurance committees. What the hon. and gallant Member has overlooked is this fact, that the cost of the insurance committees up to now has been partly borne by the Treasury and partly borne by the approved societies, and that is why his figures are not really accurate. In 1920–21 the total cost, excluding the cost of the Central Index scheme, was about 7¾d. per insured person per annum, made up of 4d. from the societies and 3¾d. from the Exchequer. In 1921–22 the cost was about 7d., namely, the 6d. to which it was raised from the societies and 1d. from the Exchequer. Under the Report of the Geddes Committee we proposed that the Central Index scheme should be abolished and that the Exchequer grant for this purpose should cease. We had no particular interest in the Central Index scheme, but the approved societies whom we consulted on the subject said that they found the Central Index of very great value.

§ Major M. WOOD
Not: in Scotland.

Sir A. MOND
Scotland, I suppose, is interested in that question as much as any other part of the country.

§ Major WOOD
It has not got one.

Sir A. MOND
We said that if the societies wished it to remain, we could not pay for it, and they would have to find the money. That is all the money that is being found, and it amounts to about ¾d. a member. I pointed out that now, instead of the 7d. for 1921–22, the cost of administration is estimated at 6¾d. for 1922–23. The hon. and gallant Member has got the idea, which I have not yet been able to fathom, that the insurance committees can spend on expenses anything up to 2s. 4½d., but he is quite mistaken. Of this 2s. 4½d., 2s. 3½d. 101 is allocated to the doctors under the present agreement, and therefore there is only 1d. left, and this 1d. is wanted for the Central Index scheme. That is why these words which the hon. and gallant Member proposes to excise are in. If he succeeded in his Amendment, the only result would be that the Central Index would go, and that would inflict a great deal more expense on the approved societies in other directions than if the Central Index were maintained. The hon. and gallant Member said that formerly we had a statutory limit up to which insurance committees could spend, but that is not quite correct. What we had was a statutory limit of what the approved societies contributed, and the balance came from the Exchequer. That statutory limit still remains, but this is only a temporary Bill, lasting for some 18 or 19 months, and under the arrangement made not more than 1d. at the outside figure can go for administration expenses. From the financial point of view, I can assure my hon. and gallant Friend he has nothing to fear, and neither has the insured person. I do not know why insurance committees should be supposed to be expensive bodies, but, however expensive they might be, all that they would have to spend would be 1d. These words in the Clause are absolutely necessary.

§ Mr. R. DAVIES
Has the right hon. Gentleman received a communication from approved societies with regard to the arrangements between the Ministry and the doctors? The approved societies are very dissatisfied that the Ministry itself makes the arrangements with the doctors rather than that the approved societies should be consulted in the matter.

Sir A. MONO
I have received a communication.